The Government needs address the issue of developers holding onto sites and not developing them, according to Fianna Fáil's housing spokesman Barry Cowen.
Mr Cowen said the Department of Finance was incentivising developers to not develop sites by allowing them an exemption from capital gains tax after seven years if their sites were bought before the end of December 2014.
The earliest date these properties would qualify for the exemption is December 2018.
He also said the Government should reduce the holding period for these sites to four years which would give investors the opportunity to sell these sites now rather than in 2018, 2019 and 2020.
"Most investors who bought sites off Nama are sitting on them and waiting until they appreciate in value at the end of the seven-year period when they can claim their capital gains exemption," he said, speaking on RTÉ's Morning Ireland.
The Vacant Site tax also needs to be increased, he said, saying it was “the only way to address this issue”.
Mr Cowen acknowledged there are issues with some of the sites which would need to be serviced, but all of these can be addressed.
“It is time to bring in an assortment of initiatives. I hope the Government will take a holistic approach in the Budget. They’ve got to grasp the nettle,” he said.
“We need to see this addressed quickly.”
‘Bigger picture’
Meanwhile, DIT lecturer in housing Lorcan Sirr has said the real figure for the number of new houses built in 2016 is 5,800.
A a report on Monday morning from MyHome.ie has said that double digit inflation on houses is likely to continue through 2018, while a Daft.ie report released yesterday said that house prices rose by €50 every day in the last year.
The MyHome.ie report gives an holistic view of the situation, said Dr Sirr. “The bigger picture is we’re in line for more of the same - double digit price inflation,” he said.
“There is very little coming down the line in the way of new houses.”
Official data says 15,000 houses were built last year; this is calculated on the basis of electrical connections. Dr Sirr said this was an inaccurate method.
The Government would be doing a better job if it used honest and transparent data, he told Newstalk Breakfast.
He warned there is a danger that the Government will do something rash such as reduce VAT for the construction sector, but there was no guarantee that saving would get passed on to the consumer.
He also said there was a risk of people believing the “fake news” figures, when really they are 40 per cent of the number being quoted in official figures.
“I feel sorry for Eoghan Murphy. It’s a case of damned if you do and damned if you don’t,” he said, referring to the Minister for Housing.
“The biggest thing that is saving us is the Central Bank cap. People can borrow up the three and a half times their salary, if that moves up to four times, the lid will come off altogether,” he said.